The STR Investment Calculator To Kick-start Your Investments

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In this Boostly podcast episode, Jeremy Werden, a short-term rental investor and founder of B&B Calc, discusses his journey from working in a startup to diving into short-term rentals. Based in New York City but operating from North Carolina, Jeremy's experience with property acquisitions, rental arbitrage, and creating unique listings led him to create B&B Calc. 

This mobile-first application simplifies the financial analysis of short-term rental investments, addressing the gap between real estate listings and understanding potential income. Jeremy highlights the significance of grasping quantitative factors in real estate investments. 

He also shares insights into leveraging investors and financing, making his episode a valuable resource for aspiring investors.

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[00:00:00] Liam: Okay. Thank you for tuning into the podcast. You're listening to the Boostly podcast. This is the podcast that gives hosts the tools, the tactics, the training, and most importantly, the confidence to go out there and get more direct bookings. My name is Liam Carilan. I'm Mark Simpson's co-host. And tonight we are doing the Spotlight series, which shines the Boostly spotlight on people, services, and businesses that you need to know about as a short-term rental host.

[00:00:23] Uh, today we've got Jeremy Werden from B& B Calc. Uh, he is also a short-term rental investor and a real estate investor. I'm excited today to dive into what his book does and to find out more about his business. So, uh, thank you very much and uh, welcome along Jeremy.

[00:00:41] Jeremy: Liam, thank you for having me. Excited to be here.

[00:00:43] Liam: So, if you could introduce yourself. Uh, where in the world your business is based and, uh, anything else you'd like to share with us?

A bit about Jeremy

[00:00:50] Jeremy: Yeah. So, uh, I live in New York City, USA. Uh, however, none of my actual real estate or short-term rental properties are here. So, uh, I'm from North Carolina and that's where I started.

[00:01:04] I initially just kind of give you a little context on my background. Um, I graduated from school in 2019. I was working for a private equity startup in New York City. And then in March 2020, COVID hit, and the world changed. I moved home and I was a little bit bored and restless and also, uh, had some concern about my financial situation and my, and my salary, uh, it got cut at the beginning of COVID.

[00:01:30] So I needed to create my own business. And initially I actually, I don't know if you guys in the UK watched the Ozarks, on TV, but I was watching that show, uh, which is about growing businesses on a lake in Missouri. And there was a lake close to me in North Carolina that I thought I could start a business on.

[00:01:52] And I did, I started a boat rental business. So I ventured into short-term rentals initially through a boat rental operation on a local lake. Different people who are renting boats were either looking at buying houses or may have already owned them and just kind of got into a conversation about helping them rent their properties out on Airbnb and other short-term rental platforms.

[00:02:12] So I initially started on Airbnb as a co-host. Uh, I use the rental arbitrage method. I have bought properties. I've purchased eight to this point, and I have, you know, pulled money from investors to buy those properties. I have an Airstream camper that I've put up on Airbnb, which I consider quote-unquote glamping.

[00:02:36] And I have developed software that helps Airbnb investors around the world, uh, underwrite deals, do quick pro forma financial analysis. And get an understanding of what the revenue and expense variables are that will help them, uh, you know, help them either be successful or at least know, Hey, this doesn't look like, you know.

[00:02:59] It'll be a successful opportunity.

What benefits does the calculator bring?

[00:03:01] Liam: Um, what does the calculator, I guess, what, what, what benefits does it bring the end user, um, how can they use it? And what makes it different from, I mean, some of the calculators that there's, there's things out there. What, what makes it unique?

[00:03:14] Jeremy: Yeah. So, let me give a little context.

[00:03:16] So when I started, I did not have a lot of money. I've put all my money, into boats. And I wanted to buy properties. I wanted to get into Airbnb. I was doing, you know, I was managing other people's properties. I was doing some arbitrage, but I, wanted to buy and to buy, I needed money.

[00:03:34] So early on, I had to do like pretty, I don't want to say sophisticated because But just, I had to do, you know, perform a financial analysis. I had to underwrite properties and I had to make sure that they were going to be successful, uh, successful deals. And I had to send them to investors. I had to send that to banks.

[00:03:53] I just needed everybody online to give a 23-year-old money. So that's what I did. I did a lot of models, and a lot of spreadsheets and did it that way. And I was just like, honestly, this spreadsheet is just not, there's, there can be a better tool than this. A lot of the data that I'm pulling from is online. Uh, there's a lot, there are short-term rental data providers, there's, you know, real estate, tax, data providers, there's just a lot of information I can get online, and the way I'm doing it, I'm just copying and pasting to a spreadsheet, which I can't do on my phone, I have to be sitting down at a computer, and you know, I'm, I'm 26, but if I can do something on my phone, I'd rather do it on my phone, uh, like some other people, so really, we built a mobile-first application that makes it easy to run the numbers on an Airbnb, uh, short term rental investment opportunity.

[00:04:47] Liam: What is your history? So is this something that came along because you used it first? Is this how that's been developed? And if you take us back to those early days in the first few deals, how have things changed from then to if you had this calculator now?

[00:05:05] Jeremy: Yeah. So initially, exactly. You hit the, you hit the nail on the head and built it for me.

[00:05:10] Myself and my team, because the issues we were having is I sent something to an investor. I have to send them a spreadsheet and then I have to, you know, I have to email it to them. I have to then hop on a Zoom to walk them through the spreadsheet. It was just, it was a tedious process. So now I can just send them a share link on my phone.

[00:05:29] So I can just text an investor, a share link. They can click it. They can see it's super readable. It gives you a really good idea of what, you know, the return profile and really the, again, the revenues, expenses, all that good stuff. So that was a huge pain point for myself was just because I had been running the numbers on so many deals.

[00:05:48] And I had been, I thought that method of sharing these opportunities with investors was just. Bad. So yeah, it was a pain point that I felt myself, but I did kind of know that I believe other people will have this pain point too. I don't think I'm alone in this and it's proven true. And again, that's probably more so just like individual understanding of, of again, your revenue expense items and ultimately where your profit's going to come.

[00:06:12] That's something that if you're a diligent investor if you're getting an Airbnb, you should do. And like, I'm not going to tell you to. Use my tool or use a spreadsheet, do whatever you want, but you should do that in the first place. If you want to do it the easiest and best, you know, the quickest way, the best way possible, use, use BNB calc, but investors everywhere, like you need to run the numbers on any investment opportunity and understand.

[00:06:38] I just say, I emphasized just understanding the variables. What goes into the investment and what they mean?

Do you think there is still a gap in the market?

[00:06:43] Liam: Do you think there's a big gap still in the market between the kind of real estate apps where you can purchase properties and the gap between people who are purchasing properties or looking for properties for short-term rental that there's kind of.

[00:07:00] The, the marrying up of kind of average daily nights and the income you can make for short-term rental versus the standard, Hey, here's the real estate. You can buy it for this much. Do you think there's still that gap to be bridged?

[00:07:11] Jeremy: Oh, a hundred per cent, a thousand per cent. I mean, I even see people who are in short-term rentals and Airbnb and they don't understand.

[00:07:20] They don't understand, understand things. And like, I know I go to conferences and I, I talked to a lot of people, but like a lot of people don't when they. Buy something. And this could be a long-term rental. This could be a commercial property or an Airbnb. They generally just have like one qualitative factor that made them think it was good.

[00:07:42] Or like a lot of times I hear, Oh, my realtor told me this would be a good investment because the area is good. Because this is a good market to buy in, quote, unquote, a good market. And I'm like, that's all you, you did. You, or maybe you saw that some social media influencer purchased a property in, you know, the Smoky Mountains.

[00:08:04] You know, if you look, if you follow me, you find the lake, I, I bought several houses on and just automatically assume that it's a good place. Like people don't look at the quantitative, they more look, you know, the qualitative is easier and that's how people get in trouble because again, they just don't understand the variables that go into being successful at this.

From business to investors

[00:08:24] Liam: You mentioned that you've, um, used some of these numbers, to gain investors. And I know there's something which a lot of people listening are going to be interested in. Can you talk us through kind of the process of how you've done it in your business, what worked for you, where you've got your kind of spreadsheets, but how do you convey that to investors?

[00:08:45] Jeremy: Yeah. And again, the context for me is. You know, I was, I was young. I wanted to get into this game. I wanted to buy real estate. I wanted more Airbnb listings. And I lacked two things. A, I lacked money. I mean, I, I needed every dollar I put into something needed to print 10. You know, I couldn't, I couldn't put a dollar in and get two cents back.

[00:09:09] Uh, B I lacked financing. I didn't even have a credit card until I was 21 years old. So not only did I lack actual cash, I lacked financing. I couldn't get loans. For properties. So I had to not only leverage other people's money, but I had to leverage other people's financing. And that meant getting someone on board to like to sign on to a loan, you know, having someone give you cash is one thing, but having someone essentially, you know, be, be an MIT, be essentially like a facilitator between someone else and a bank, which is what I was.

[00:09:43] That's a process where you need every like you need just good communication, uh, good resources, investment criteria, uh, investment pitch materials, pro forma financial analysis, like that's, that's imperative. Again, not only investors but also the financing necessary to fund these investments. Having a blast.

[00:10:05] Gonna get it on the Boostly podcast, Bruce Lee. Let Bruce Lee 'cause it's so hard on the tees loose leaf. I looked up those rhymes. Don't write it, just do it loosely.